Canada and USA back at WTO over COOL

By Keith Nuthall

- Last updated on GMT

Ottawa has asked permission to impose levies that would yield CA$3.068 billion in annual revenues
Ottawa has asked permission to impose levies that would yield CA$3.068 billion in annual revenues

Related tags: United states house of representatives, World trade organization, Wto

The World Trade Organisation (WTO) has once again been asked to arbitrate over the dispute between Canada and the US over American country-of-origin labelling (COOL) for meat and livestock products.

This time it will assess how much money Ottawa should claim through compensatory tariffs.

A WTO appellate body has already ruled that COOL breaks global trading rules, and a bill that would repeal the system has been proposed at the US House of Representatives. However, amidst tough lobbying by American agricultural interests, this bill has yet to be passed.

So, Canada and Mexico, who both won WTO cases against COOL, are pushing ahead with their right to impose WTO-authorised retaliatory tariffs on American exports into their countries.

Ottawa has gone the furthest and has asked permission to impose levies that would yield CA$3.068 billion (US$2.5bn) in annual revenues. According to Canadian government documents, this could include 100% surtaxes on American exports of live cattle and swine, fresh, frozen, chilled, prepared or preserved beef and pork, and fowl offal, among other food and non-food products.

But Washington DC argues that Canada’s claim is far in excess of any losses suffered by its meat and livestock sector because of COOL, and has challenged the claim. It must now be assessed by another WTO disputes panel.

A US diplomat told a special meeting of the WTO disputes settlement body (DSB) on Wednesday (17 June) that the "level of Canada’s request is quite excessive".​ The diplomat also added that the US "strongly disagrees with Canada’s specific proposal for the suspension of concessions [erecting new duties]".

A Canadian diplomat meanwhile said Ottawa was "deeply disappointed that the US continues to maintain a measure that is inconsistent with its WTO obligations",​ while acknowledging "some efforts"​ in the House of Representatives to deal with the problem. As a result of COOL, the Canadian meat and livestock sector continues "on a daily basis, to be adversely effected",​ hindering "the supply of Canadian livestock to the US market"​, said the diplomat. Canada has called for an immediate repeal of COOL regarding muscle cuts of beef and pork.

Meanwhile, the US used a procedural objection to delay a claim by Mexico for WTO authorisation of its retaliatory duties (expected to generate US$653m in revenue annually). This will now be heard by a special DSB meeting on 29 June. Washington seized on errors in a Mexican document filed on 4 June, saying revisions had been supplied too late for presentation at this week’s meeting.

Related topics: Meat

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